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PRECIOUS-Gold flat after hits 1-mth high, silver jumps 3 pct
June 6, 2012 / 9:55 AM / in 5 years

PRECIOUS-Gold flat after hits 1-mth high, silver jumps 3 pct

* Gold erases initialy gain on optimistic Fed assessment
    * Silver up 3 pct as industrial metals, US equities rally
    * Hopes of European resuce on Spain's banks help
    * Top Fed official said may need further easing
    * Coming up: U.S. weekly jobless claims Thursday

 (Recasts, adds details, updates comment, market activity)	
    By Frank Tang	
    NEW YORK, June 6 (Reuters) - Gold prices ended a shade
higher after a choppy session o n W ednesday, as an encouraging
assessment of the U.S. economy by the Federal Reserve wiped out
the safe-haven metal's early peak at a one-month high built on
speculation of more monetary easing from central banks.	
    The metal fell more than $20 an ounce or 1 percent from the
month-high earlier in the session after the Fed said in its
latest "Beige Book" summary of national activity that economic
growth picked up over the last two months and hiring showed
signs of a modest increase. 	
    Silver outperformed gold and finished up 3 percent as U.S.
equities and industrial commodities rallied on better economic
sentiment on growing hopes of a European bailout for Spain's
troubled banks.     	
    Some investors lessened their bullish bets on gold after its
4.3 percent rally on Friday, when surprisingly weak U.S.
payrolls data reignited talk of another round of monetary easing
from the Federal Reserve. Traders said gold could further unwind
its gains if central banks do not commit to more stimulus.	
    "The Beige Book indicated that the economic condition was
better than what was priced in with the weak payrolls data, and
that removed some of the premium based on an imminent Fed
action," said Frank McGhee, head precious metals trader of
Integrated Brokerage Services LLC.	
    Spot gold was up 0.1 percent at $1,618.40 an ounce by
3:19 p.m. EDT (1919 GMT), after hitting a high of $1,640.50 an
ounce, which marked the strongest price since May 7.	
    On the charts, gold found support at its 50-day moving
average near $1,618 an ounce, and analysts said a bullish
double-bottom pattern also underpinned buying.	
    U.S. COMEX gold futures for August delivery settled
up $17.30 an ounce at $1,634.20, with trading volume set to be
the highest so far this week, preliminary Reuters data showed,
as trading desks in Britain returned from a two-day holiday.	
    The metal was also under pressure as investors digested news
that the European Central Bank put the onus firmly on euro zone
governments to solve the bloc's debt crisis, dashing
expectations it could take near-term action. 	
    Silver performed better than gold because of its heavy use
as an industrial metal. Spot silver rose 2.8 percent to
$29.29 an ounce, having touched its highest since May 8 at
$29.94 an ounce, as it took the lead from copper and other base
    Last Friday's dismal U.S. nonfarm payrolls data has
pressured the Fed to do more to help a slowing U.S. economy.
Atlanta Fed President Dennis Lockhart said on Wednesday that the
U.S. central bank may need to ease monetary policy further if a
wobbly U.S. economy falters or Europe's crisis triggers a
broader financial shock. 	
    While some investors took profits after gold's near 4
percent rise last week, traders said gold could still outperform
the equities market on safe-haven bids due to a worsening of
Europe's debt crisis.	
    "While stocks may be nearing an attractive entry point,
precious metals may be rising on investors' shopping lists as
they start to look at deploying cash positions," said Jeff
Kleintop, chief market strategist of broker-dealer LPL
    On platinum group metals, spot platinum was up 1.8
percent at $1,454.80 an ounce, while spot palladium edged
up 0.4 percent at $622.03 an ounce.	
 3:19 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1634.20  17.30   1.1  1614.40 1642.40  165,281
 US Silver JUL  29.488  1.083   3.8   28.410  29.865   59,134
 US Plat JUL   1469.20  28.70   2.0  1433.80 1470.40   10,008
 US Pall SEP    632.80  13.00   2.1   620.35  633.80    3,332
 Gold          1618.40   1.15   0.1  1614.36 1640.50         
 Silver         29.290  0.790   2.8   28.500  29.880
 Platinum      1454.80  25.55   1.8  1438.00 1466.74
 Palladium      622.03   2.53   0.4   623.25  629.75
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        173,969   209,892   195,756     24.06   -0.58
 US Silver       72,948    51,077    52,906     33.43   -3.10
 US Platinum     11,235     7,975     7,961        18    0.00
 US Palladium     3,375     5,843     4,573                  
 (Additional reporting by Jan Harvey in London; Editing by David
Gregorio and Marguerita Choy)

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